Fund overview
The fund exists to provide a combination of capital appreciation and a growing level of dividend distribution. The fund aims to offer an income yield which is at least 5% higher than the yield on the FTSE Europe Ex UK index, holding a maximum of 60 conviction stocks.
Manager
Andrea Williams manages a variety of European equity funds at RLAM. She has managed the Royal London European Income Fund since launch in October 2009 and also runs a range of Life and Pension funds for the Royal London Group. Andrea has been with the group since the 1980s, working initially as a UK analyst before moving to cover the US and European equity markets. Andrea is a graduate of South Bank Polytechnic and has a degree in Business Studies.
Investment approach
The fund manager has a dual approach with a focus on both top down and bottom up analysis. The use of internal and external inputs allows Andrea to formulate views on the direction and magnitude of economic growth. These “top down” economic views are incorporated into the portfolio with sector themes. More critical in the process is the “bottom up” stock selection. Andrea focuses on identifying well managed companies with strong business models, that are soundly financed and that can be purchased on a reasonable valuation. She uses a range of metrics to identify such companies. These include some of the more the traditional methods such as price/earnings multiples and earnings per share growth, but she also uses a proprietary RLAM model that analyses the return that a company delivers on its invested capital relative to its cost of capital and compares that against the market valuation.
Finally, as this is an income fund Andrea also puts great emphasis on ensuring that the companies held in the portfolio have a sustainable free cash flow that can deliver a growing dividend stream to the fund holder.